S&P moves Mannington view to stable

S&P said it changed Mannington Mills Inc.’s outlook to stable from negative and affirmed the BB- ratings on the company and its term loan. The notes’ 3 recovery rating is unchanged.

“Compared to previous assumptions, we now expect a near 50% jump in 2021 adjusted EBITDA from year-end 2020. The 50% year-over-year climb stems from increased demand in the company's end markets, pricing initiatives to mitigate cost inflations and stronger-than-anticipated orders. In addition to continued tailwinds, the company's rolling-12-month debt to EBITDA on June 30, 2021, was 4x, which provides some assurance that earnings will keep the company well below its 5x downside trigger for the next 12 months,” S&P said in a press release.

The agency said it sees Mannington delivering free cash flow of $25 million-$45 million over the next 12 months.

“The stable outlook reflects our expectation that Mannington will generate moderate sales and implement pricing initiatives to control costs such that adjusted leverage will be 3x-4x,” S&P said.

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